Cole: Tax Relief for All Americans

In 1986, then President Ronald Reagan introduced a sweeping plan to reform our nation’s tax system, and it worked. It simplified the outdated tax code which opened the door for individual prosperity and spurred economic growth. It also became one of the highlights of his presidency. Since then, our society has grown and the value of the U.S. dollar has changed. The working middle-class taxpayer today probably does not have the same priorities as they did in 1986. After five different administrations following Reagan, our country has yet to see a major overhaul of our tax system to fit the needs of every class of Americans. It’s time that we adjust, simplify and reform our broken tax code.

Last week, House Republicans, the Trump Administration and the Senate Finance Committee unveiled the structure and framework for a tax system that fits the 21st century. It is a plan that will deliver economic growth, incentivize the American taxpayer, provide relief for small businesses and simplify the filing process. This means that Americans can keep more of their hard-earned money and have a tax system they actually understand. Furthermore, it means relief for small businesses and corporations through generous tax cuts.

A major reform to the tax code begins with the individual and families. Fundamentally, it is the answer to the creation of a fair and simpler system. The new plan will first double the standard deduction that individuals and families can take. For joint filers, this means they can keep the first $24,000 of their hard-earned money. Single filers will be able to keep $12,000. Essentially, this creates a “zero” percent tax bracket by eliminating taxes on that first earning.

One of the more complicated parts of our current tax code are the seven tax brackets imposed on taxpayers. Those seven brackets have been reduced to three in the new plan – 12%, 25% and 35%. For many families that have filed under the 10% bracket, the new lower tier bracket of 12% is offset by the larger standard deduction, a larger child tax credit and further tax relief that will be debated in the legislative process.

For years, businesses and corporations have protested the burdensome and onerous tax rates that they face here in the United States, and it led to many taking their businesses overseas. Under the proposed reform, the tax structure for businesses provides overdue relief. It reduces the corporate tax rate to 20%, which is below the 22.5% average of the industrialized world, and it caps the tax rate at 25% for small businesses.

In essence, this plan is a recipe for American prosperity. From job creation to bringing profits back home, businesses will flourish and promote American ingenuity. Families and individuals can focus on buying homes or preparing for retirement. As with all legislation in Congress, this plan is subject to the legislative process, where it will be debated as well as detailed to fit every class of Americans. But in the months to come, I am optimistic that we will have major tax legislation before the end of the year.